I don't get the pricing, the 5850 was only $300 at launch, without any competition other than the 5870 in the DX11 world at the time.

I think the pricing is that they want to make money before kepler, realistically you would expect Nvidia to be better because they had such an advantage in the last set of GPU's. So even if nvidia just went with a die shrink they should have the same if not better performance.